It’s been a rough ride for the crypto market through 2022. As of November, the market had dipped by more than 70 percent from its previous high at the end of November. When things were going downhill, the FTX crash made them look more dire. The question is, can the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has experienced its fair share of drops in the past. And every time, it’s bounced back with a big rally.
In 2013, for instance, Bitcoin reached a peak of $1,160, then fell for over a year before reaching a bottom of $150. But, in 2017, it broke the record and reached a new high of $19,600. Fast forward to 2018, it was trading at $3,100. And in 2020, the price broke that resistance and hit a new peak of $68,000 in the month of November 2021. And just like that, we’ve seen another dip. But history shows us that at the end of every dip the bull runs.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed before, fall-offs are typically followed by a lengthy bull run, which eventually breaks through the resistance created by the previous high price. This pattern is evident not only in Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has made significant progress in the last few years. With more and more companies and industries taking to the technology, its use and acceptance is growing. From banking to gaming the use of crypto is increasing in a variety of ways. And this growing use case could lead to more people being involved in the market and, in turn, boost prices.
The rise in interest of institutions in crypto
In recent years we’ve noticed a growing curiosity from institutions investing in cryptocurrency. From banks to hedge funds numerous large institutions are starting to explore the potential in crypto currencies. This increased interest from institutions can bring stability to the crypto market and result in more expensive prices.
Regulations of the government
As the crypto market continues to mature and mature, governments across the globe are beginning to establish more favorable rules for crypto. This could help attract more investors and boost the adoption rate of crypto.
Blockchain has many more applications.
The technology that is the basis of many cryptocurrency, blockchain, is a broad range of potential use cases that go beyond financial transactions. In addition to supply chain management, voting and other systems industries are exploring ways they can make use of blockchain technology. This could drive more investment and interest in crypto.
Advancements in technology
Blockchain and cryptocurrency technology is still in the early stages of development. As progress is made in areas like scalability and security, the potential of cryptocurrency assets will continue to increase. This could lead to more use and increase in prices.
Global economic uncertainty is growing
Due to the constant economic uncertainty caused due to the COVID-19 pandemic and other factors, more and more investors are beginning to look for safe haven assets like gold and crypto. As the global economic situation remains uncertain it could result in an increase in demand for crypto and more expensive prices.
Interest from retail investors
Institutional investors aren’t the only ones showing interest in cryptocurrency. Retail investors, or individual investors are also beginning to invest in the cryptocurrency market. As more and more people are educated about crypto and how to invest in it this could result in increased demand and higher prices.
Growing awareness and acceptance of cryptocurrency
As the crypto market continues to mature increasing numbers of people are starting to learn about and understand the concept. As the awareness and acceptance of crypto grows it could result in more people buying and holding crypto, which can raise prices.
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Financial decentralization (DeFi) is an area that is rapidly expanding in the crypto market that enables financial services to be created on top of blockchain technology. As DeFi grows and more projects and platforms become available, this could lead to increased adoption and higher prices for crypto.
Advances in crypto-based payment methods
As the crypto market is growing, more and more companies are beginning accepting crypto payments as a method of payment. This could lead to an increase in the use of crypto in regular transactions and an increase in the cost of transactions.
The increased investment of sovereign wealth funds
These funds are state-owned investment vehicles, are starting to show interest in crypto as an asset class. As more of these funds devote a percentage or their entire portfolios to cryptocurrency, it could result in a rise in demand and increased prices.
Use of crypto for cross-border payments
One of the biggest benefits of crypto is the capability to perform fast and cheap cross-border payments. As more and more people and businesses begin to use cryptocurrency for international transactions it could result in increased the demand for it and a rise in prices.
Increasing numbers of crypto ATM’s
As the number of ATMs for crypto increase, it will become easier for people to buy and store crypto, which could drive up demand and prices.
The development of security tokens
Security tokens, or digital assets that are used to represent ownership of an asset, such as real estate or stock, are a rapidly growing area of the crypto market. With the increasing number of security tokens being created and traded, it can lead to a higher demand and higher rates for the crypto.
More adoption by merchants
With the increasing number of retailers start accepting cryptocurrency as a method of payment, this makes it easier for people to use and hold crypto, which can increase demand and price.
So, is crypto likely to increase in 2023? The only way to know is time. But with these factors being considered, it’s possible that the crypto market could have a rebound by 2023. If you’re looking to invest for the long haul, being patient and disciplined is crucial.